Ford, Macy's Stick With Goldman in Wake of SEC Suit

By Matt Townsend and Christine Harper -
Apr 20, 2010

Ford Motor Co., National
Semiconductor Corp. and Macy’s Inc. are among companies planning
to maintain relationships with Goldman Sachs Group Inc. after
the U.S. Securities and Exchange Commission charged the firm
with fraud.

“We have had a long relationship with Goldman Sachs and
expect it to continue,” said Ford spokesman Mark Truby,
declining to comment further. Goldman Sachs took Ford public in
1956 and John Thornton, a former Goldman Sachs executive, sits
on Ford’s board.

The SEC accused the New-York based firm on April 16 of
creating and selling collateralized debt obligations tied to
subprime mortgages in 2007 without disclosing that hedge fund
Paulson & Co. helped choose the underlying securities. It also
didn’t say that Paulson bet against the securities, the SEC
said.

“We have spent an enormous amount of time talking to our
clients,” David Viniar, Goldman Sachs’s chief financial
officer, told reporters on a conference call today. “We found
that largely our clients are supportive of us and the most
important thing is to perform.”

Rite Aid Corp., based in Camp Hill, Pennsylvania, also
doesn’t plan to amend its relationship with Goldman Sachs,
spokeswoman Karen Rugen said in an e-mail. Goldman Sachs is a
participant in the company’s senior credit facility, she said.

‘Business as Usual’

“Everything’s business as usual with Goldman,” said LuAnn
Jenkins, a spokeswoman for National Semiconductor, based in
Santa Clara, California. She declined to comment on past and
future relationships with Goldman Sachs.

Macy’s is happy with the advisory services Goldman provides
the Cincinnati-based department-store chain and doesn’t plan any
changes, Jim Sluzewski, a spokesman for Macy’s Inc., said in an
e-mail.

“The argument that Goldman takes positions in opposition
to its clients has always been there, yet people continue to do
business with Goldman Sachs,” said Richard Bove, an analyst at
Rochdale Securities in Lutz, Florida, in an interview today with
Bloomberg Television. “The reason is they aren’t playing the
clients, they are benefiting the clients. There is no firm that
can step in and replace them.” Bove recommends buying shares of
Goldman Sachs.

British Government

U.S. companies were joined today by the U.K. government,
which said that it would keep employing the company two days
after Prime Minister Gordon Brown decried the “moral
bankruptcy” evident in the SEC’s suit against Goldman Sachs.

“I don’t think you can stop doing business with a firm
because an individual is accused of doing something,”
Chancellor of the Exchequer Alistair Darling said today.

The U.K.’s Financial Services Authority said in a statement
today that it will begin a formal probe into Goldman Sachs.